Employer Contribution, How Does it Work?
My employer offers health insurance. My cost per month after the employers contribution is $350 per month. I can’t afford this. I recently obtained coverage through the marketplace and I am paying $197.00 a month.
I asked my employer if she would contribute the $150 she contributes to the other employees who can’t afford the coverage she is offering and was told no. That she only contributes if I chose the plan she has offered me.
My question is : Does she have to contribute towards my chosen plan since I can’t afford the plan she offered me? If so can you please send me some literature to present to her.
I would greatly appreciate any advice or help you can offer.
Your employer only has to contribute to a health plan they offer. You can't use cost assistance if they offer coverage. That being said, if the plan you are being offered costs more than 9.5% of your household income after deductions, then you can get an exemption from the Marketplace due to unaffordable employer coverage.
If your employer wanted to fund your individual premium there are a set of rules to follow. They can be found in IRS notice 2013-54.
Here is the HealthCare.Gov page on unaffordable coverage.
Given your explanation above, I am confused because I thought we could use the income reported in box 1 of the W-2 for our safe harbor. Box 1 of Form W-2 is used to report the total federally taxable income earned during the year. So I am confused regarding the sentence “household income after deductions …”
Can you please clarify?
Household income is MAGI of the head of household (and spouse if filing jointly) plus the AGI plus the AGI of anyone claimed as a dependent. The exact amount that employer coverage can’t exceed changes every year, but it is always around 9.5% for getting marketplace coverage and it was around 8% for being exempted from the fee (although that could still be relevant in states with their own mandate).
I’ve answered you that way, because any safe-harbors or rules of thumb for getting around this are just about making sure you are right with the actual rule, where the rule is household income as compared to the current % amount for employer affordability. https://obamacarefacts.com/affordable-employer-sponsored-coverage/ and https://obamacarefacts.com/questions/what-does-household-income-mean/